Project Background: The benefit of "tight glycemic control" in decreasing microvascular events over a 10 year period is based upon the UKPDS trial. An epidemiological follow-up demonstrates an association with improved microvascular and macrovascular complications over a 20 year period. However, a recent prospective cohort study suggests that the cardiovascular benefit of tighter glycemic control in more recent onset disease may be limited to individuals with a lower illness burden. The VADT and ACCORD studies demonstrate an increasing rate and risk of hypoglycemia in patients with a longer duration of diabetes. Such patients are still healthier than many veterans who have significant comorbid disease burdens alongside diabetes. Overall, the relative risks and benefits of tight glycemic control, especially with newer medications, have been understudied in patients with additional chronic complex diseases. Project Objectives In order to understand the value of these newer medications on the VHA diabetes population, we intend to develop a VHA specific model of tight glycemic control for new onset diabetes by adapting the Centers for Disease Control Diabetes Outcomes model. The goal of this pilot study is to develop new methodology for developing such a cost-effectiveness model incorporating inputs from specific aims 1 to 3 below. Among veterans aged 25-64 years with newly diagnosed diabetes, we will: Aim 1: Evaluate healthcare resource utilization and costs associated with the provision of diabetes-related outpatient care to veterans, with and without chronic complex illnesses. We will evaluate differences in utilization and costs among patient groups according to the presence of concordant and discordant co-morbid chronic complex illnesses. Aim 2: Evaluate healthcare utilization and costs associated with inpatient care for diabetes-related complications in veterans, with and without chronic complex illnesses. Complications include macrovascular, microvascular and metabolic complications. Aim 3: Among veterans with discordant illnesses, we will specifically explore inpatient and outpatient utilization and costs for veterans with mental illness and/or substance abuse as these patients may require more intensive care to achieve tight glycemic control. Project Methods We will use the Diabetes Epidemiology Cohort (DEpiC), developed using VHA data for FY 2003 and FY 2004, to evaluate resource utilization in the inpatient and outpatient settings for veterans with recently diagnosed diabetes, using existing definitions of recent diagnosis and type II diabetes. Chronic complex illness will be categorized as 1) no CCI;2) concordant conditions only;3) discordant conditions only;4) both concordant and discordant chronic complex illnesses. Categorization will be based on ICD-9 and CPT codes, using a validated and established protocol developed within this research group. Costs will be developed from Health Economics Resource Center average cost data, in order to develop estimates of costs of delivering diabetes care, managing diabetes complications in the outpatient setting and managing diabetes complications in the inpatient setting.